The Planning Commission was set up in March 1950 in pursuance of declared objectives of the Government to promote a rapid rise in the standard of living of the people by efficient exploitation of the resources of the country, increasing production and offering opportunities to all for employment in the service of the community. It was charged with the responsibility of making an assessment of all resources of the country augmenting deficient resources, formulating a plan for the most effective and balanced utilization of resources and determining priorities. Jawaharlal Nehru was the first chairman of the Planning Commission.
First Plan
Keeping in view the large-scale import of food grains in 1951 and inflationary pressures on the economy, the First Plan (1951-56) accorded the highest priority to agriculture including irrigation and power projects. About 44.6 per cent of the total outlay of ₹ 2,069 crores in the public sector (later raised to ₹ 2,378 crores) was allocated for this purpose. The Plan aimed at increasing the rate of investment from five to about seven per cent of the national income.
Second Plan
The Second Five-Year Plan (1956-57 to 1960-61) sought to promote a pattern of development, which would ultimately lead to the establishment of a socialistic pattern of society in India. Its main aims were (i) an increase of 25 per cent in the national income; (ii) rapid industrialization with particular emphasis on the development of basic and heavy industries; (iii) large expansion of employment opportunities; and (iv) reduction of inequalities in income and wealth and a more even distribution of economic power. The Plan aimed at increasing the rate of investment from about seven per cent of the national income to 11 per cent by 1960-61. It laid emphasis on industrialization, increased production of iron and steel, heavy chemicals including nitrogenous fertilizers and development of heavy engineering and machine-building industry.
Third Plan
The Third Plan (1961-62 to 1965-66) aimed at securing a marked advance towards self-sustaining growth. Its immediate objectives were to : (i) secure an increase in the national income of over five per cent per annum and at the same time ensure a pattern of investment which could sustain this rate of growth in the subsequent Plan periods; (ii) achieve self-sufficiency in food grains and increase agricultural production to meet the requirements of industry and exports; (iii) expand basic industries like steel, chemicals, fuel and power and establish machine-building capacity so that the requirements of further industrialization could be met within a period of about 10 years mainly from the country’s own resources; (iv) fully utilize the manpower resources of the country and ensure a substantial expansion in employment opportunities; and establish progressively greater equality of opportunity and bring about reduction in disparities of income and wealth and a more even distribution of economic power. The Plan aimed at increasing the national income by about 30 per cent from ₹ 14,500 crores in
1960-61 to about ₹ 19,000 crores by 1965-66 (at 1960-61 prices) and per capita income by about 17 per cent from 330 to 386 over the same period.
